CrossRef Open Access 2021 7 sitasi

Opacity, liquidity and disclosure requirements

André Stenzel Wolf Wagner

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Abstrak

AbstractWe present a model that links the opacity of an asset to its liquidity. We show that while low‐opacity assets are liquid, intermediate levels of opacity provide incentives for investors to acquire private information, causing adverse selection and illiquidity. High opacity, however, benefits liquidity by reducing the value of a unit of private information. The cross‐section of bid–ask spreads of US firms is shown to be broadly consistent with this hump‐shaped relationship between opacity and illiquidity. Our analysis suggests that uniform disclosure standards may be suboptimal; efficient disclosure can instead be achieved through a two‐tier standard system or by subsidizing voluntary disclosure.

Penulis (2)

André Stenzel

Wolf Wagner

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Stenzel, A., Wagner, W. (2021). Opacity, liquidity and disclosure requirements. https://doi.org/10.1111/jbfa.12574

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Lihat di Sumber doi.org/10.1111/jbfa.12574

Informasi Jurnal

Tahun Terbit: 2021
Bahasa: en
Total Sitasi: 7×
Sumber Database: CrossRef
DOI: 10.1111/jbfa.12574
Akses: Open Access ✓